American Campus Communities (NYSE: ACC) and Colony Capital (NYSE:CLNY) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Earnings & Valuation

This table compares American Campus Communities and Colony Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Campus Communities $786.36 million 7.43 $99.06 million $0.41 104.39
Colony Capital N/A N/A N/A $0.83 N/A

American Campus Communities has higher revenue and earnings than Colony Capital. Colony Capital is trading at a lower price-to-earnings ratio than American Campus Communities, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for American Campus Communities and Colony Capital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Campus Communities 0 5 8 0 2.62
Colony Capital 0 1 1 0 2.50

American Campus Communities currently has a consensus target price of $52.22, suggesting a potential upside of 22.01%. Colony Capital has a consensus target price of $27.50, suggesting a potential upside of Infinity. Given Colony Capital’s higher possible upside, analysts plainly believe Colony Capital is more favorable than American Campus Communities.

Institutional and Insider Ownership

94.1% of Colony Capital shares are held by institutional investors. 0.7% of American Campus Communities shares are held by insiders. Comparatively, 17.7% of Colony Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares American Campus Communities and Colony Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Campus Communities 7.16% 1.58% 0.89%
Colony Capital 31.43% 3.16% 2.88%

Dividends

American Campus Communities pays an annual dividend of $1.76 per share and has a dividend yield of 4.1%. Colony Capital pays an annual dividend of $1.60 per share. American Campus Communities pays out 429.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Colony Capital pays out 192.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Campus Communities has raised its dividend for 7 consecutive years and Colony Capital has raised its dividend for 4 consecutive years. American Campus Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Colony Capital beats American Campus Communities on 8 of the 13 factors compared between the two stocks.

About American Campus Communities

American Campus Communities, Inc. is a self-managed and self-administered equity real estate investment trust (REIT). The Company’s segments include Wholly-Owned Properties, On-Campus Participating Properties, Development Services, and Property Management Services. It is engaged in the acquisition, design, financing, development, construction management, leasing and management of student housing properties. The Wholly-Owned Properties segment consists of off-campus properties, which are located in close proximity to the school campus. The On-Campus Participating Properties segment includes on-campus properties that are operated under long-term ground/facility leases with three university systems. The Development Services segment consists of development and construction management services that it provides through one of its taxable REIT subsidiaries for third-party owners. The Property Management Services segment includes revenues generated from third-party management contracts.

About Colony Capital

Colony Capital, Inc., formerly Colony Financial, Inc., is a global real estate and investment management company. The Company operates through five segments: Real Estate Equity, including Light industrial real estate assets and operating platform; Single-family residential rentals through an investment in Colony Starwood Homes and Other real estate equity investments; Real Estate Debt, which includes loan originations and acquisitions, and Investment Management, which includes investment management of the Company-sponsored funds and other investment vehicles. Through its global investment management business, it has over $18.8 billion of assets under management. Its business objective is to provide risk-adjusted returns to its investors through a diversified portfolio of direct and indirect real estate-related equity and real estate debt investments, and fee bearing management contracts on investment funds that it manages.

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